tax question

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C

CU

Platinum Member
Aug 14, 2000
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I work in NC and live in SC. I was looking at getting solar panels and using SC's tax credit. However, that doesn't appear possible as I work in NC and therefor have no SC tax liability for the credit to count towards. Does that make sense? Or does anyone have experience with this? Losing the SC tax credit really hurts the wallet. Thanks.
 
I

interchange

Diamond Member
Oct 10, 1999
8,026
2,879
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CU said:
I work in NC and live in SC. I was looking at getting solar panels and using SC's tax credit. However, that doesn't appear possible as I work in NC and therefor have no SC tax liability for the credit to count towards. Does that make sense? Or does anyone have experience with this? Losing the SC tax credit really hurts the wallet. Thanks.
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Sounds about right to me.

Edit: some states have credits that carry over, etc. And a credit is different than a deduction. I wonder if it is possible to claim a credit without earning income (you'd still have to file a return).
 
BoomerD

BoomerD

No Lifer
Feb 26, 2006
65,898
14,296
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It sucks, but if you have no tax liability in the state, (you're not taxed on income earned out of state?) what can you take a credit for?
 
D

[DHT]Osiris

Lifer
Dec 15, 2015
17,143
16,302
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Do property taxes count? Can you defer the tax credit over several years to basically blank your prop taxes out? Not sure if that's a thing.

Can see if NC will let you carry over the tax credit from SC, some states let you do that.
 
C

CU

Platinum Member
Aug 14, 2000
2,415
51
91
The credit does carry over for 10 years though. Now if I could only predict where I would be working 5-10 years from now. These kind of credits really get people who live near their states border and are likely to work one state over. At least I find out before I put down a large chunk of cash thinking I would get it right back next year as a credit.

Not sure about property taxes helping, but I do own a house that I pay taxes on.

I can check if NC lets you carry over the tax credit from SC. I don't suppose anyone here knows do they.
 
highland145

highland145

Lifer
Oct 12, 2009
43,973
6,336
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I thought you paid income tax in the state that you lived. Meaning that whatever $$ you pay in NC gets transferred to SC for tax purposes. But it's been a long time since I did taxes at the office.
 
C

CU

Platinum Member
Aug 14, 2000
2,415
51
91
highland145 said:
I thought you paid income tax in the state that you lived. Meaning that whatever $$ you pay in NC gets transferred to SC for tax purposes. But it's been a long time since I did taxes at the office.
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It looks like you pay taxes in both states, but you file a tax credit in SC for the taxes you paid in NC. That effectively wipes out your tax liability in SC only leaving you paying NC taxes.
 
BoomerD

BoomerD

No Lifer
Feb 26, 2006
65,898
14,296
146
highland145 said:
I thought you paid income tax in the state that you lived. Meaning that whatever $$ you pay in NC gets transferred to SC for tax purposes. But it's been a long time since I did taxes at the office.
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When I worked out of state, I paid taxes in my home state and in whatever state where I worked. A couple of years, I had to file 6-8 different state returns.
 
highland145

highland145

Lifer
Oct 12, 2009
43,973
6,336
136
CU said:
It looks like you pay taxes in both states, but you file a tax credit in SC for the taxes you paid in NC. That effectively wipes out your tax liability in SC only leaving you paying NC taxes.
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Got it.
BoomerD said:
When I worked out of state, I paid taxes in my home state and in whatever state where I worked. A couple of years, I had to file 6-8 different state returns.
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Bet you loved tax season.:)
 
S

Schfifty Five

Lifer
Oct 20, 2005
10,978
44
91
If it's a credit, shouldn't you get that amount refunded to you?

I get if it was a deduction, and you had no taxable income to reduce with it, then that wouldn't work, but if it's a credit, I would think it just nets against what taxes you owe, $0 in this case, and you'd come out with the full credit amount.
 
highland145

highland145

Lifer
Oct 12, 2009
43,973
6,336
136
But you still file a tax return in S.C. right? If so then the solar credit would earn you a refund in S.C. even though you paid no taxes. Just like the EITC. And I could still be wrong.;)

Edit: What Schfifty said.
 
C

CU

Platinum Member
Aug 14, 2000
2,415
51
91
Schfifty Five said:
If it's a credit, shouldn't you get that amount refunded to you?

I get if it was a deduction, and you had no taxable income to reduce with it, then that wouldn't work, but if it's a credit, I would think it just nets against what taxes you owe, $0 in this case, and you'd come out with the full credit amount.
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There is a difference between non-refundable and refundable. One stops you at $0 and the other keeps going. I thought they were all the same also, but that would be too simple.
 
highland145

highland145

Lifer
Oct 12, 2009
43,973
6,336
136
Where are our tax people?

Your tax liability is what you owe the state based on your income, right? Prior to the credit for N.C., you still have a liability to SC because of you income and you're a resident.

I give...
 
C

CU

Platinum Member
Aug 14, 2000
2,415
51
91
For what its worth my tax person also says I wouldn't get the credit. It just sounds strange when I say I cannot use a SC tax credit when I live in SC. That is why I started this post and started reading as much tax stuff as I could bear. Not really that fun to read.

Maybe it is not so much the lack of tax liability, but the fact that the credit for NC drops me to zero. So, there is nothing for the solar credit to apply to. Non-refundable vs refundable credit maybe.
 
I

interchange

Diamond Member
Oct 10, 1999
8,026
2,879
136
CU said:
For what its worth my tax person also says I wouldn't get the credit. It just sounds strange when I say I cannot use a SC tax credit when I live in SC.
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Not weird at all. They want you to produce for the state economy as much as possible. Why would they be interested in giving you a freebie?
 
C

CU

Platinum Member
Aug 14, 2000
2,415
51
91
interchange said:
Not weird at all. They want you to produce for the state economy as much as possible. Why would they be interested in giving you a freebie?
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To look "green" and cut the local power plant some slack. But, yeah I see your point.
 
Fern

Fern

Elite Member
Sep 30, 2003
26,907
174
106
CU said:
-snip-
I can check if NC lets you carry over the tax credit from SC. I don't suppose anyone here knows do they.
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No, you cannot "carry over the tax credit from SC" to offset NC income tax. NC currently offers no solar tax credit (expired in 2015 IIRC) and when they did have one it required the solar project to be located in the state of NC.

Fern
 
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